12 Apr 2018

PROGRESS ON EU RETAIL REGULATION IS A FIRST STEP & MUST BE BUILT UPON

IFA President Joe Healy will address the Agriculture Committee of the European Parliament today when the latest Commission proposal on retail regulation will be discussed.

Joe Healy acknowledged the initiative by the EU Commissioner for Agriculture Phil Hogan in prioritising the imbalance in the food supply chain and recognising the vulnerability of producers in it. “The introduction of a minimum common standard of protection across Member States is to be welcomed, but this is only a first step in reining in retailers and rebalancing power in the food chain. The current situation, where processors and retailers always make a margin while farmers are sometimes forced to produce at or below the cost of production, is totally unacceptable.”

The IFA President noted that the Directive provides for the designation of ‘a public authority’ for the purpose of enforcement. “IFA’s experience is that an independent Retail Regulator with a specific remit is required, similar to the UK Grocery Code Adjudicator which has proved to be a game-changer. In Ireland’s case, this function is being subsumed in the Competition and Consumer Protection Commission, where its effectiveness is lost. The proposed Directive holds up the UK model as best practice, and this is the model that the Irish Government must follow.”

The Irish Grocery Goods Regulations 2016 introduced measures in this country banning Unfair Trading Practices (UTPs), which are now to be outlawed at European level under the proposed Directive. Joe Healy said “the single biggest issue for farmers is that they have no confidence in the CCPC to enforce the regulations. The establishment by the Government of a visible and active independent Retail Regulator would give confidence to suppliers that their complaints would be taken seriously and pursued”.

Mr Healy said “the aim of the harmonisation approach being proposed, is to tackle a short list of UTPs and to provide for enforcement powers to tackle the fear factor. In addition, it is proposed that the European Commission will establish a network of enforcement authorities, to allow for the exchange of best enforcement practices and a platform to discuss and improve the application of UTP rules.”

Joe Healy called on the European Parliament to strengthen the legislation by adding other UTPs so that producers have clear written contracts, and in order to tackle abuses by retailers including unsustainable discounting/below-cost selling and payment for retention or better positioning of shelf space.

The IFA President pointed out that the Commission’s proposals on UTPs are to be followed by new legislation on transparency in the food chain. “This must provide for mandatory price reporting at all levels in the food chain, so that margins and profitability of processors and retailers are clearly visible.”

Finally, further EU measures are required to increase the transparency rules for processor and retailer multinationals and provide for the reporting of turnover, profit and taxation within each Member State.